Allen v. Krueger Ringier, Inc. (In re Allen)

183 B.R. 519
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedOctober 24, 1994
DocketBankruptcy No. 91 B 69474; Adv. No. 93 A 550
StatusPublished
Cited by2 cases

This text of 183 B.R. 519 (Allen v. Krueger Ringier, Inc. (In re Allen)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allen v. Krueger Ringier, Inc. (In re Allen), 183 B.R. 519 (Ill. 1994).

Opinion

[522]*522 MEMORANDUM OPINION

DAVID H. COAR, Bankruptcy Judge.

The matters before the Court are the Plaintiff’s Motion for Summary Judgment and the Defendant’s Cross Motion for Partial Summary Judgment and for Stay of Proceedings and Referral to the Interstate Commerce Commission (“Commission”). The Plaintiff, L. Lou Allen, trustee on behalf of the bankruptcy estate of TSC Express Co. (“Trustee”), seeks to recover freight charges for transportation services provided to the Defendant, Krueger Ringier, Inc. (“KRI”). KRI contends that a portion of the transportation services provided were outside the scope of TSC Express Co’s (“TSC”) statutory authority, therefore any recovery for such services would be inappropriate. For the remaining services, KRI seeks a referral to the Commission for a determination on whether the Trustee has acted reasonably in attempting to recover the freight charges and whether the charges sought are reasonable. Pending a resolution of these issues by the Commission, KRI seeks a stay of this proceeding. The Court, having considered the memoranda of law and affidavits submitted by the parties, now rules as follows.

FACTS

On May 14,1991, TSC filed its petition for bankruptcy under chapter 7 of the Bankruptcy Code, 11 U.S.C. §§ 101-1330. Prior to filing for bankruptcy, TSC operated as a motor common carrier trucking company, authorized to and actually doing business in interstate commerce pursuant to 49 U.S.C. §§ 10101-11917, and the rules and regulations of the Commission. In addition, TSC operated as an intrastate trucking company pursuant to Georgia law.

During the period between May 16, 1988 and September 15, 1989, TSC, as a motor common carrier, transported certain goods and/or merchandise from and to various locations of KRI. After delivering the products to KRI, TSC billed KRI for its services at the rate agreed upon by the two parties. Shortly thereafter, KRI paid these invoices in full. But, TSC never filed a copy of the negotiated price agreement with the Commission, in contravention to 49 U.S.C. § 10764. Subsequently, TSC ceased transporting property and filed its petition for bankruptcy relief.

The Trustee, with the prior approval of the bankruptcy court, contracted for an audit of all TSC freight bills for the three years prior to bankruptcy in order to determine the difference between the rates filed by TSC with the Commission and the rates that TSC had negotiated and billed KRI. (In numerous prior cases with similar facts, this difference has been referred to as the “undercharge”.) Based on the audit results, the Trustee billed KRI $12,299.11 for undercharges. KRI has refused to pay, and the Trustee now seeks to recover the undercharges, pre-judgment interest of $2,938.73, and any other costs.

[523]*523KRI contends that TSC acted outside the scope of its statutory authority for certain intrastate shipments, representing $8,545.50 of the total undercharges. A motor common carrier in the state of Georgia is required to impose the rates that they have filed with the Georgia Public Service Commission (“GPSC”). Ga.Code Ann. §§ 46-7-18 and -19 (Michie 1992). KRI alleges that TSC did not file their rates in a manner that conforms with this requirement.

Accordingly, TSC’s failure to file their tariffs with the GPSC constitutes a violation of Georgia law., entitling KRI to summary judgment. With respect to the remaining undercharges, KRI asserts that the Trustee’s attempt to collect the undercharges constitutes an “unreasonable practice”, as defined by 49 U.S.C. § 10701, as amended by the Negotiated Rates Act of 1993, and that the rate the Trustee seeks to recover is unreasonably high. Therefore, KRI requests that this Court stay this proceeding pending a determination by the Commission regarding both the reasonableness of the Trustee’s attempt to collect the undercharge and the reasonableness of TSC’s rates filed with the Commission.

BACKGROUND

The Commission regulates interstate transportation by motor common carriers to ensure that rates assessed for transportation services provided by motor common carriers are both reasonable and not discriminatory. Maislin Industries, U.S. Inc. v. Primary Steel, Inc., 497 U.S. 116, 119, 110 S.Ct. 2759, 2762, 111 L.Ed.2d 94 (1990); 49 U.S.C. §§ 10101(a), 10701(a), 10741(b). The only rates that motor common carriers may charge are those that have been filed with the Commission. 49 U.S.C. §§ 10761, 10762. This requirement, known as the “filed rate doctrine”, has been strictly adhered to by the courts. Reiter v. Cooper, — U.S. -, -, 113 S.Ct. 1213, 1216, 122 L.Ed.2d 604 (1993); Maislin, 497 U.S. at 128, 110 S.Ct. at 2766; Louisville & Nashville R.R. Co. v. Maxwell, 237 U.S. 94, 96, 35 S.Ct. 494, 495, 59 L.Ed. 853 (1915). Any rate not filed with the Commission, even one negotiated and agreed upon by the parties, is unenforceable. Maislin, 497 U.S. at 127, 110 S.Ct. at 2766.

However, the filed rate must be reasonable in order to be enforceable. Maislin, 497 U.S. at 128, 110 S.Ct. at 2766; Maxwell, 237 U.S. at 96, 35 S.Ct. at 495. The Commission may investigate the reasonableness of a rate “on its own initiative or on a complaint.” 49 U.S.C. § 11701(a). Upon declaring a rate unreasonable, the Commission has the power to prescribe the rate to be charged and hold the motor common carrier liable for damages for the imposition of an unreasonable act. Maislin, 497 U.S. at 119-20, 110 S.Ct. at 2762; 49 U.S.C. §§ 10704(b)(1), 11705(b)(3).

Since the deregulation of the trucking industry, pursuant to the enactment of the Motor Carrier Act of 1980, Pub.L. No. 96-296, 94 Stat. 793, motor common carriers have frequently negotiated rates with its shippers and then neglected to file these rates with the Commission. Reiter, — U.S. at -, 113 S.Ct. at 1216. Shippers reasoned that carriers would not enforce its filed rates because of the high price elasticity of the deregulated motor common carrier industry. Overland Express, Inc. v. Interstate Commerce Comm’n, 996 F.2d 356, 357 (D.C.Cir.1993). However, the shippers failed to foresee the effect that bankruptcy would have on the negotiated rates.

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Bluebook (online)
183 B.R. 519, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allen-v-krueger-ringier-inc-in-re-allen-ilnb-1994.